Rio+20 side event: No One-Size-Fits-All - Exploring New Sustainable and Socially Inclusive Biofuels Experiences in Developing and Least Developed Countries

Rio de Janeiro18 juin 2012

[AS PREPARED FOR DELIVERY]

The human and social dimension of biofuels

Ladies and gentlemen,

It is my pleasure to welcome you on behalf of UNCTAD to the side event "No One-Size-Fits-All: Exploring New Sustainable and Socially Inclusive Biofuels Experiences in Developing and Least Developed Countries". UNCTAD has jointly organized this event with the Brazilian Military Institute of Engineering (IME) and I would like to warmly thank the General and his staff for hosting us at their headquarters in this idyllic part of Rio.

Making the case for biofuels in Brazil can be considered, as some would say, preaching to the converted. Brazil is already one of the world's largest biofuel producers and users, and has pioneered several technological advances in this dynamic sector over the past three decades. Thus, Brazil is well aware of the potential and benefits of biofuels and its society has embraced them as part of an alternative approach to confront past, present and future energy needs.

But even beyond Brazil, the use of biofuels has expanded significantly since the 1970s, and the technology is now in use in a larger number of countries and in a wider range of economic sectors.

FAO and OECD figures show that, in 2010, worldwide biofuel (bioethanol and biodiesel) production reached 105 billion liters, and this figure is expected to almost double by 2020. Provided that oil prices remain relatively high - which is a likely scenario - the production of biofuels is thus expected to grow at double-digit rates for the next decade. Most of the biofuels produced are consumed at the national and local levels, with only 7 per cent of total production being exported. This illustrates the fact that biofuels are mainly used for energy diversification and national energy security strategies.

However, in addition to the wider use, the production of biofuels has also changed dramatically over the past decade or so. Many of these changes have been brought about by concerns over the impact of biofuel production on land use and food security. In this context, sustainability requirements and certification schemes in major markets have led to considerable adjustments and improvements in many aspects of the biofuel business model.

Fundamental changes in the harvesting methods of biofuel producing crops, in the collection of inputs, in the type of inputs used, the production methods, and in storage and distribution schemes have all contributed to a more efficient and sustainable biofuel production process - from cultivation or collection to final production and distribution.

With today's technologies, biofuels can also be produced from a much wider range of edible crops as well as several non-food biological resources, such as jatropha, algae, and agricultural residues. While the amount of non-food crops used in the biofuel production is still low, the use of second-generation technologies may significantly change the sources of biofuels within the next decade.

And if biofuels were originally mainly used in the transport sector, they are now used for a number of other sectors as well, such as electricity generation, chemical blending, clean cooking and even in the aviation industry. These options and possibilities enhance their value for human development.

Scales and locations have also changed. Due to high prices of fossil based energy and the incorporation of financial and procurement incentives, biofuels are now becoming an option for small-scale electricity generation in isolated locations of developing and least developed countries.

Ladies and gentlemen,

All of these developments demonstrate the growing potential of biofuels as an alternative source of energy. However, beyond this, biofuels also have important human and social development dimensions, which are the focus of today's discussions. Indeed, we have learned that taking these dimensions into account is a crucial aspect of successful biofuel promotion initiatives. If carefully conceived and managed, biofuel projects and investments have the potential not only to improve energy security, but also to create job and income opportunities in rural areas, boost local innovation systems and add value to agricultural production. Allow me therefore to mention just a few examples:

Biofuel production is becoming an increasingly relevant source of employment in some developing countries. This is particular true in the case of second-generation biofuels, where the levels of value addition in the production process and the qualifications required from workers and professionals are much higher. For example, in a recent UNCTAD study on the contribution of biofuels to the rural economy in Mexico (forthcoming in 2012), there is evidence that producing biofuels from agricultural residues can result in substantial increases in employment in Mexican agriculture. Bioelectricity from agricultural residues could add more than 39.000 new jobs (direct and indirect), bioethanol more than 49.000, biodiesel 71.000, and biogas 4.000 jobs. These opportunities come with better wages and demands for higher qualification than the current average in Mexican agriculture. Worldwide, it has been estimated that 1.4 million people were employed in biofuels production as of 2010, and if current growth rates continue, biofuels businesses are expected to create another 2 million jobs globally by 2020.

But this is not the end of the story. Many countries are successfully designing and adapting their biofuel production and distribution systems to address local concerns and needs, for example through initiatives to provide energy to isolated regions, or to make biofuels an explicit component of national, regional and local development strategies.

Experiences in Nepal and the Brazilian Amazon, which will be presented today, have demonstrated that it is not only economically feasible to engage in small-scale biofuel models, but that they can also contribute to local job creation, social inclusion, the use of local plant species, improvement in waste management and the provision of affordable electricity in areas that lack access to modern energy services. In Nepal, 85% of all energy is produced from traditional biomass, including biofuels, with a significant impact on job creation and local livelihoods. It has been estimated that if Nepal uses its existing capacities to produce biofuels for blending purposes (without compromising food security), it could easily substitute about 14% of its current gasoline imports. In the case of the Amazon Region, small biofuel production facilities could use local plants as inputs to satisfy the electricity needs of isolated communities.

This promising scenario has not, however, prevailed everywhere. In Peru, for example, excitement over biofuel crop production in the Amazon contrasts with concerns about the loss of tropical forests and changes in land use, as well as the indirect effects of roads, infrastructure and disorganized human settlements, not to mention the potential risks regarding protected areas and buffer zones. Biofuels production will become sustainable only if due consideration is given to the specific ecological, social and economic features in the countries concerned and if there is political will to develop and implement appropriate and effective assessment and mitigation strategies.

In closing, biofuel is emerging as one of the green economy sectors with great potential for many developing countries. New biofuel models, if based on sustainability criteria and properly designed, monitored and implemented, can help address not only energy and income concerns but also environmental, social and rural development objectives. If we can develop systems which promote social and rural development and allow technology transfer and investment among a broad number producers and consumers, biofuels could be truly transformed into a vehicle for livelihood improvement in the areas most in need.

This afternoon, I look forward to the discussions between policy-makers, experts and business leaders from different parts of the world, sharing their views on what has been done right and what can still be done to maximize positive human and social impacts of biofuel production and usage.